More money will be generated upon retirement and people will have more money in their hands. Under this scheme, equity investment will reduce when the shareholder turns 45 years old. As per NPS rules, this deduction starts from the age of 35 years.
New Delhi. There is big news for those who invest in the National Pension System (NPS). Pension fund regulator PFRDA has talked about making big changes to make this scheme attractive. The pension regulator claims that after this, more money will be earned on retirement and people will have more money in their hands. Now there is a plan to increase the exposure of equity to get more return on its investment.
In fact, to make the New Pension System (NPS) attractive among the youth, the government is preparing to introduce a ‘New Balanced Life Cycle Fund’. This will help the shareholder to create a good corpus till retirement. Under this proposed scheme of PFRDA, more investment amount can be allocated in equity fund for a long time. Under this scheme, equity investment will gradually decrease when the shareholder turns 45 years old, whereas currently this reduction starts from the age of 35 years.
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How to create a huge fund
In fact, the pension regulator has talked about increasing the investment in equity for another 10 years. Its purpose is to get higher returns than the market. In this way, shareholders joining NPS will get the facility to allocate more investment amount in equity funds till the age of 45. This will help them in creating a good fund till retirement.
When will the new plan come?
Pension Fund Regulatory and Development Authority (PFRDA) chairman Deepak Mohanty said on Friday, ‘We will introduce a ‘New Balanced Life Cycle Fund’ in the second quarter (July-September) to allocate investments in equity share funds for a longer period of time. This will enable more allocation in equity funds for a longer period of time and investors will get the benefit of the market. Currently, this reduction in equity starts from the age of 35 years.
There will be a balance between risk and return
The PFRDA chief said, if this happens, people opting for NPS will be able to invest more money in equity funds for a long time. This will increase the pension fund in the long run while also establishing a balance between risk and return. Referring to the Atal Pension Yojana (APY), Mohanty said that in the last financial year 2023-24, 1.22 lakh new subscribers joined APY. This is the highest number ever in any financial year since the scheme was launched. According to PFRDA, the total number of subscribers joining APY is expected to cross 6.62 crores by June 2024.
Tags: Atal pension, Business news, New Pension Scheme, pension fund
FIRST PUBLISHED : June 21, 2024, 18:39 IST